Brave New World For Yellow Pages: Google Nabs Marketshare, Strangles Local Directories

Earlier, this spring, a number of local search marketers noticed that Google began displaying a 10-pack of local business listings based on searchers’ geolocation even when search queries didn’t include a local search term (such as a city name). Matt McGee suggested that this would likely alter user behavior and reduce referral traffic to online directories. Stats show it may have happened.

As you may recall, Google has increasingly mixed specialized, “vertical” search content into keyword search results for the past few years. Google refers to this as “Universal Search though other search engines have forms of this as well, referred to more generically as “blended search.”

Nowhere has blended search been quite so prominent as in the area of local searches. Sure, the little icons one can see for image and video results for some queries are attention-getting, but the local 10-pack of business directory listings coupled with a pinpoint map takes up more Google search results page real estate than any other piece of inserted vertical search content.

Previously, the 10-pack (and 3-pack and 1-box) business listing results primarily appeared when users included a qualifier to queries indicating that they were seeking local-specific information. Queries such as “dallas accountants” or “pizza in chicago” would invoke a local 10-pack, while broader queries without local qualifiers would not. But, that paradigm shifted late last year and more dramatically in Spring of 2009 (some experts such as Steve Espinosa suggest that the shift may’ve begun in late 2008, and I believe that’s the case—I believe Google tested this, perhaps on some limited number of broad keywords, and then expanded to a fuller set of commonly-sought local business-type keywords). Google has now been displaying a local 10-pack of results for these common local business keywords for a number of months.

The effect of this change appears to be a sharp reduction in the number of referrals from Google to internet yellow pages sites and other types of business directories. Compare in Google Trends—Google’s view of visitors to some top yellow page sites and business directories (Yellowpages.com, Superpages.com, Citysearch.com, Whitepages.com):

A number of notable local info sites appear to be bucking the trend or holding steady—most notably Yelp which is still holding steady, but also MerchantCircle, Zillow, ServiceMagic, and Realtor.com:

Also, Craigslist and BBB.org are also bucking the trend.

Now, I’m fully aware that there are literally thousands of variables involved which can affect daily unique visit metrics for these sites, and how Google Trends chooses to account visits can also affect these graphs. The only other recent data I’ve seen on this subject was some comScore graphs from a few days ago with an article on Techcrunch which noted that Yelp has doubled its audience in the last year while Citysearch has remained flat. In Google’s eyes according to the Google Trends graphs I provided above, Citysearch has actually lost visitors while Yelp is gaining.

Discrepancies in the graphs can be explained to some degree by different accounting methods and data sources—comScore is based on one sample set which would include usage going through Yahoo! and Bing, while Google is only seeing Google-centric traffic. I think Google Trends may be excluding some paid traffic as well, while comScore would be more of a catchall.

It’ll be interesting to see if the trends shown in Google’s graphs are reflected when the next comparative internet yellow pages ranking report emerges from comScore or Hitwise.

Still, it’s striking and likely significant to see that in Google’s eyes, quite a few of the major business directory sites have dropped in terms of organic referral visits. Since Google is leader in search marketshare, this represents a meaningful impact. This could definitely be impacted by the economy, yet, I’d expect the impact to have started earlier if the trends were merely due to economic issues. Adjusting for seasonal spiking from the late 2008 holiday season, it appears that the sites I mentioned lost significant amounts of referrals, and this happened during the timeframe when Google began displaying the 10-pack for a greater number of searches.

I interpret the main cause to be a change in users’ behavior. As more local listings were pushed directly to searchers from Google Maps in the 10-pack, fewer people found it necessary to click through to browse for businesses in local directory sites and internet yellow pages.

Now, this is not good news for the embattled yellow pages industry, who did not need to be losing marketshare to Google, particularly at this time. However, it’s vital that this trend be understood and aggressively fought, and it should be noted that Google has not completely closed the doors on directory sites. Not at all.

To turn this trend around, it’s necessary for sites which lost ground to step up their SEO efforts and to adapt to the changing conditions. Rapidly.

For now, Google’s still only displaying the local 10-pack for a limited, albeit substantial, number of business search terms. I see the 10-pack is not being automatically invoked in a great many cases where product names, alternative category names, and longer-tail keywords are being used in combo with local search terms. For instance, I just now searched for “asphalt roofing shingles, shreveport, la“, and there was no 10-pack invoked! There are a great many potential long-tail local business queries like this which can turn into valuable referrals for IYPs and business directories.

I see quite a lot of lost opportunities in SEO terms when I look over most business directory sites. Displaying the same, bare-bones content for a business’s listing which is also being displayed on hundreds of other sites is going to be less and less sufficient to maintaining organic referral traffic from search.

It may be necessary to expand out your taxonomy development efforts or partner with a company like ShopLocal, NearByNow or Where2GetIt to find out what is being sold at many of the stores listed in your directory. Finding ways to expand out keyword-rich description data about companies could be the deciding point in whether or not sites can continue to obtain natural, non-paid referral traffic.

Probably the biggest barrier for most online directories is in terms of slowness to evolve—either in recognizing the issues keeping them from obtaining and increasing search engine traffic or in streamlining IT development cycles in order to be sufficiently responsive to the changing landscape. I believe that some level of natural search traffic is vital on the internet for these directories for them to remain viable—both in terms of being able to monetize visitor traffic, as well as a vehicle for self-promotion in encouraging businesses to advertise. Yet, if a bureaucratic process is keeping you from being effective, it must be reengineered.

Two key aspects are likely playing into Yelp’s ability to continue to grow traffic, even while Google is pushing their own Maps listings to consumers for more local queries. One aspect is Yelp’s oft-cited ability to create and grow a strong community following as an effective blending of social media with business directory. Quite a few of these directories which have recently lost referral traffic according to Google Trends are also offering some user reviews and rating features in hopes of gaining Yelp’s level of success. Yet, they’ve failed to make such rating features easily usable, robust, and their user interfaces are cold and uncompelling in terms of giving a friendly “feel.” Are the tools flexible enough for users? Is the interface both intuitive and friendly? Do you allow users to customize their profile pages?

Another aspect helping Yelp during this period is that they’re essentially a poster-child for semantic markup. This spring, Google’s introduction of rich snippets has allowed Yelp’s listings in the SERPs to stand out more, attracting consumers to click more due to the “bling” decorating the listings in the form of the star ratings (though, Insiderpages listings also have the same treatment in Google SERPs, but perhaps their pages may not rank as well as Yelp’s for various other reasons). There are now some very good reasons why sites with ratings and reviews should be adopting microformats, and it’s not that hard to do! For a more detailed explanation, read my recap on the subject, Why Use Microformats?

The unfortunate side effect of Google’s improving usability in local search results may be that this could result in some sort of industry-wide chilling effect. If IYPs and directory sites are feeling closed-out of Google search referral traffic, they may react by reviewing their engagement strategies and setting up restrictions on partnership deals with the search engine. Quite a number of these sites are already in some level of “coopetition” with Google, partnering on one hand by selling ads into the search engine’s network and delivering data into Google Maps while also attempting to continue to remain local info destination sites.

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